Archive for March, 2009

Asia stocks mixed amid gloomy growth forecasts (AP)

Tuesday, March 31st, 2009 | Finance News

BANGKOK – Asian markets were mixed Tuesday amid low expectations for the summit of G-20 leaders and gloomy forecasts the region would continue to struggle as the global economy flounders. European markets rose in early trade.

Economic fears weighed on investors as the Asian Development Bank slashed its 2009 growth forecast for the region's developing economies due to plunging exports. Meanwhile, an Australia central banker said the country's economy would shrink this year.

The region's markets tumbled Monday as events in the U.S. signaled that ailing auto giants General Motors and Chrysler were being corralled into Chapter 11 bankruptcy protection by the Obama administration. But benchmarks are still up strongly for the month, reflecting a rally that some analysts say was driven largely window-dressing by big funds.

"There were a lot of big names active in the past month trying to talk up the market and improve performance because for many fund managers March is the last month of the financial year," said Arjuna Mahendran, head of Asian investment strategy at HSBC Private Bank in Singapore.

"That fed on itself but it didn't reflect anything fundamental. First quarter corporate results are bound to be downbeat and on the macroeconomic front, the situation is still very opaque," he said.

Japan's Nikkei 225 stock average reversed early gains to fall 126.55 points, or 1.5 percent, to 8,109.53, while Hong Kong's Hang Seng was up 119.69, or 0.9 percent, to 13576.02 after diving nearly 5 percent on Monday.

In South Korea, where a central bank survey showed manufacturers were becoming less pessimistic, the Kospi was up 0.7 percent. Mainland China's Shanghai index gained 0.6 percent, Australia's index was down 0.6 percent, while Singapore's index rose 1.7 percent. Markets in New Zealand and the Philippines fell.

European markets were higher in morning trade, with Britain's FTSE 100 up 2.2 percent, Germany's DAX adding 0.9 percent and France's CAC-40 gaining 1.2 percent. Stock futures pointed to modest gains Tuesday on Wall Street. Dow futures rose 60 points, or 0.8 percent, to 7,540 and S&P500 futures gained 6.7, or 0.9 percent, to 791.

Ahead of a closely watched U.S. employment report at the end of the week, there was further evidence from Japan that its economy, the world's second-largest, continues to slump. Japan's unemployment rate jumped to 4.4 percent in February and families sharply cut spending, underscoring the government's growing sense of urgency that it needs to mount a bigger defense.

Prime Minister Taro Aso is expected to unveil new stimulus measures during this week's Group of 20 summit in London, on top of about 12 trillion yen ($122 billion) in public spending announced last year.

Even so, hopes have faded that the meeting of the 20 biggest industrialized and developing nations — who together make up 85 percent of the world economy — will produce any breakthrough measures to counter the worst economic slump since the Great Depression of the 1930s.

In a worst case scenario, the summit could even exacerbate tensions between the U.S., the European Union and China over economic and fiscal policies. Czech Prime Minister Mirek Topolanek, who is also EU President, highlighted those faultlines last week when he slammed President Barack Obama's plan to spend nearly $2 trillion to push the U.S. economy out of recession as "the road to hell."

"We are going into the meeting with low expectations which is a good thing because it will help avoid disappointment," said Mahendran of HSBC.

Investors are also bracing for a raft of first quarter earnings reports, which are generally expected to confirm companies endured lousy business conditions in the first three months of 2009.

Overnight in the U.S., the Dow Jones industrials tumbled 254.16, or 3.3 percent, to 7,522.02. It was down as much as 339 points. The Standard & Poor's 500 index fell 28.41, or 3.5 percent, to 787.53, while the Nasdaq composite index fell 43.40, or 2.8 percent, to 1,501.80.

In oil markets, prices edged up Tuesday in Asia but remained below $50 a barrel as the increasing likelihood of a major automaker bankruptcy in the U.S. sparked renewed jitters over the global economy.

Benchmark crude for May delivery rose 74 cents to $49.15 in Asian electronic trading on the New York Mercantile Exchange. The contract fell more than 7.6 percent, or $3.97, to settle at $48.41 on Monday.

In currencies, the dollar rose to 98.39 yen from 97.34 late Monday in New York, while the euro rose to $1.3258 from $1.3185.

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AP business writer Jeremiah Marquez in Hong Kong contributed to this report.

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U.S. stock futures point to higher open (Reuters)

Tuesday, March 31st, 2009 | Finance News

* U.S. stock index futures pointed to a higher open on Wall Street on Tuesday, with futures for the S&P 500 up 0.8 percent, Dow Jones futures 0.8 percent higher, and Nasdaq 100 up 1.1 percent at 0903 GMT.

* The U.S. Chicago PMI for March is due at 1345 GMT with economists in a Reuters survey forecasting a reading of 34.5 in the month compared with 35.2 in February.

* U.S. consumer confidence due out at 1400 GMT is expected to have edged up in March from the record low hit in February. Economists in a Reuters survey expect a reading of 28.0 compared with 25.0 in February.

* Bookseller Borders (BGP.N) posts quarterly results. Analysts expect the company to earn 95 cents a share, excluding items, down from $1.44 a year earlier, according to Reuters Estimates.

* No. 2 U.S. homebuilder Lennar Corp (LEN.N) reports fiscal first-quarter results. Analysts, on average, expect a deeper net loss as the company scrambles to sell off inventory in the face of a prolonged U.S. recession. They expect the company to post a loss of 69 cents.

* Shares in American Electric Power (AEP.N) fell 4 percent in extended trade after the company cut its guidance to below Wall Street estimates and scaled back capital spending plans for next year.

* The Wall Street Journal reported Google (GOOG.O) is expected to announce more detail about its highly anticipated venture-capital fund, including its plan to commit roughly $100 million to the endeavor in its first year, said people familiar with the matter.

* Goldman Sachs (GS.N) banker Byron Trott, one of Warren Buffett's main deal makers, is leaving to start his own merchant-banking firm, according to people familiar with the matter, and Buffett's Berkshire Hathaway (BRKa.N) plans to invest in the entity, reported the Wall Street Journal.

* The Wall Street Journal said Eli Lilly & Co (LLY.N) Chief Executive John Lechleiter said the drug maker is looking for acquisitions of as much as $15 billion now it has digested ImClone Systems.

* U.S. stocks tumbled on Monday as two major U.S. automakers took a step closer to potential bankruptcy, and a spate of European bank rescues heightened concerns over the financial system's health, putting the brakes on a recent run-up.

* On Monday, the Dow Jones industrial average (.DJI) lost 3.27 percent, the Standard & Poor's 500 Index (.SPX) tumbled 3.48 percent and the Nasdaq Composite Index (.IXIC) fell 2.81 percent.

* Japan's Nikkei stock average fell 1.5 percent on Tuesday, with banks and insurers down, but the mood was more optimistic in Europe, where the FTSEurofirst 300 (.FTEU3) index of top European shares was up 1.3 percent in a broad rally.

(Additional reporting Blaise Robinson)

(Reporting by Joanne Frearson; Editing by Dan Lalor)

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Boeing to deliver $17 billion of planes to India in 5 years (Reuters)

Tuesday, March 31st, 2009 | Finance News

BANGALORE (Reuters) –
U.S. aircraft maker Boeing Co (BA.N) will deliver 100 planes worth $17 billion over the next four to five years in India, the president of its Indian operations said on Tuesday.

"We clearly want to extend our footprint in India," Dinesh Keskar, president of Boeing India, told reporters at the launch of Boeing's research and technology center in the southern city of Bangalore.

Last year Boeing had projected India would need 1,001 aircraft worth more than $105 billion over the next 20 years and Keskar said the forecast was still valid despite an economic downturn.

Boeing has not seen any cancellation of its order for civilian aircraft from Indian airlines, though Jet Airways (JET.BO) deferred the order of two aircraft last year, he said.

Boeing, which also competes for defense projects in Asia's third-largest economy, and European rival Airbus (EAD.PA) have seen new orders for planes slump as many major economies have slid into recession.

DREAMLINER COMPENSATION

Boeing will pay compensation to national carrier Air India and Jet Airways for the delay in delivery of 787 Dreamliner, Keskar said, but declined to quantify.

Rival Airbus was forced to pay hundreds of millions of dollars in compensation after its A380 superjumbo fell two years behind schedule. Now Boeing may face similar claims.

More than 50 airlines are waiting for 892 Boeing 787s, worth a combined $145 billion at list prices.

Earlier this month Boeing said it was working toward the first delivery of the delayed 787 in the first quarter of 2010. It was on track to make its first test flight of the aircraft in the second quarter of 2009.

(Editing by Ranjit Gangadharan)

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